Stock exchange soars with inflation data pointing to cut in interest rates

Encouraging inflation data, which has given a boost to hopes of an interest rate cut, sparked a new wave of buying on the Warsaw Stock Exchange (WSE) yesterday. The blue-chip WIG 20 index soared 5.4%, to close at 1,192.9 points in robust zl.387 million trade. The index ended the day 22% above its three-year low set last month. And, analysts said, more gains were in sight ahead of next week's meeting of the central bank's Monetary Policy Council (RPP). "Optimistic inflation data and hopes for a rate cut coupled with the warm mood on the western markets propelled investors to snap up Polish stocks," said Piotr Marczewski of Amerbrokers. The market expects the RPP to slash as much as 200 basis points off the stiflingly high rates, after inflation fell to a new post-1989 low of 4.3% in September. (Reuters)